Maruti gets tough with workers but won't close Manesar plant

To fire workers, derecognise new union but no plans to curtail investment, says CEO

Toughening its stance against employees allegedly involved in the violence that led to the death of a senior HR executive at its Manesar facility, Maruti Suzuki on Friday said it would derecognise the Maruti Suzuki Workers’ Union (MSWU) registered earlier this year.

The company has also decided to take action against many of the 90-odd workers who have been arrested and said all those named by the 100 injured company executives in connection with the incident would be dismissed from service.

S Y Siddiqui, chief operating officer (HR, finance, IT and COSL), said, “We have received instructions from the parent, Suzuki Motor Corporation, to not compromise on issues of violence. We will derecognise the union at the Manesar plant. All those identified in connection with the incident will be dismissed immediately.”

The company is preparing a plan to shift workers from its Gurgaon facility and also hire new ones to fill the vacancies thus caused. It has decided to get the Manesar unit up and running but will take a decision on when to resume production only after assessing the damage to the plant.

“I want to start operations as soon as possible. There has been some damage in the shop-floor area and the administration office has to be completely rebuilt. Most of our managers are in hospital. But, we are looking at hiring fresh employees at our Gurgaon facility and shifting some experienced management executives and senior workers to form a nucleus at Manesar and commence production,” said CEO and Managing Director Shinzo Nakanishi.

The Manesar unit, which manufactures 1,600 vehicles a day on average, accounts for 45 per cent of Maruti Suzuki’s overall production. The facility rolls out some of the company’s best-selling models, including the Swift and the Swift DZire.

Nakanishi said the company had an inventory of around 100,000 vehicles, including 15,000 units in stockyards across the Gurgaon and Manesar facilities. The rest are with dealers. “We do have stocks for about a month. But there will be delays in delivering models made in Manesar if production does not start soon,” said Nakanishi. He admitted the schedule of the much awaited new Maruti 800-cc car could get delayed as a result of the disruption at the unit. The car was slated to be launched during the festival season.

Nakanishi clarified investments would continue to be made as planned in the plant and there was no question of shifting production. “The third plant at Manesar will be commissioned as planned. We are also not looking at advancing operations at Gujarat or shifting out of Haryana.” He, however, said the management might have made a mistake in supporting the new union. “I did not see any shadow of external influence when we signed the settlement agreement. If there was outside influence, it is our mistake that we could not find out,” he said.